Prescription Drug Benefits: Year 2006

On January 1, 2006, the new
Medicare prescription drug plan -- also called Medicare Part D -- will be
available to people with Medicare. This will give you some insurance coverage
for brand name and generic
prescription drugs. Medicare will work with insurers and
other private companies to offer a number of different
plans.

You'll have quite a few options. You will be able to:

Buy a plan that offers the drug benefit alone.

Choose a Medicare Advantage plan that has prescription
drug benefits.

Keep an existing Medigap plan (H, I, or J) that covers
prescription drugs, as long
as you don't sign up for the new drug benefit.

Keep the prescription drug benefits you get from your
employer or other health plan (instead of getting drug benefits from Medicare).

There are many different plans, and the specifics vary. But here's one
example:

Each month, you pay a monthly fee -- or premium -- to
stay in the program. The fee will vary by plan and
region. In 2006, this fee will be about $32 a month.

You also pay a deductible of $250. This means that
you have to pay the first $250 of
medication fees out of
your own pocket. Once you've paid $250, your
Medicare
prescription drug plan kicks in.

Then, when you buy medications, your plan will cover some
of the costs. But there is a gap in coverage. Once you've spent $2,250 on
prescription drugs, Medicare stops paying a share of the cost. You have to pay
the next $2,850 on your own. After that point -- when you have spent a total of
$3,600 in out of pocket costs -- the plan kicks in again and pays 95% for the
rest of the
year.

You have to pay whatever is left over. The exact costs vary,
depending on which drugs you need, and how much you spend on them each
year. However, some Medicare drug plans might offer some assistance in
this coverage gap.